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ZEEL Q2FY16 net zooms 8.5% due to strong revenue growth
MUMBAI: Making a turn-around in the second quarter of FY16, compared to the year-ago period when the net profit of the company had actually seen a 4 per cent dip, Subhash Chandra-promoted Zee Entertainment Enterprises Ltd (ZEEL) has posted a healthy 8.5 per cent jump in net profit.
For the quarter ended 30 September, the bottom-line of the media conglomerate has swelled on the back of a strong 24 per cent revenue growth, compared to a muted growth in the previous year quarter.
ZEEL’s consolidated net profit stood at Rs 246.3 crore (Rs 2.46 billion) in Q2FY16, compared to Rs 227 crore (Rs 2.27 billion) a year ago.
While operating revenue grew 23.9 per cent, expenses were up 29.2 per cent compared to the year-ago period.
Total revenue during the quarter stood at Rs 1,384.9 crore (Rs 13.85 billion) compared to Rs 1,117.8 crore (Rs 11.18 billion) in the corresponding quarter of the previous fiscal.
ZEEL chairman Subhash Chandra said, “ZEE has seen an impressive performance during the second quarter. The improvement in advertisement industry and improved performance of our network has helped us grow ahead of the market. We continue to see the positive results of our investments. We will endeavour to continue on this track going forward and pursue new opportunities that will yield long-term growth. Our effort is to entertain audience across the world.”
Strong ad revenue growth
Advertising revenue for the quarter stood at Rs 843.3 crore (Rs 8.43 billion), up 34.7 per cent. However, this also included advertising revenues of newly launched &TV, which was not there in the year-ago period.
However, even excluding &TV, ZEEL’s ad revenue growth stood at 26 per cent.
ZEEL MD and CEO Punit Goenka added, “We are quite pleased with our quarterly performance and it continues to remain on track. We have grown as a network on the back of superior programming on our new and existing products. The improvement in the overall advertisement market has further aided our strong growth. The domestic subscription market has also seen steady growth.”
“Going forward, our endeavour would be to further enhance our offerings and be ahead of the market in delivering innovative and high-quality entertainment to our viewers across consumption platforms. We believe that in this fast-evolving media and entertainment space delivering excellent content will remain key for monetising revenues, from both advertising and subscription standpoint,” he added.
Subscription revenue jumps 12.9 per cent
During the quarter under review, ZEEL’s overall subscription revenues saw a 12.9 per cent increase to Rs 479.1 crore (Rs 4.79 billion).
Domestic subscription revenues stood at Rs 375.2 crore (Rs 3.75 billion), registering 11.3 per cent growth over the year-ago period.
International subscription income in the quarter was up 19.2 per cent to Rs 103.9 crore (Rs 1.04 billion).
ZEEL’s total expenses increased by 29.2 per cent to Rs 1,030.3 crore (Rs 10.30 billion). Operating cost for the quarter saw a 28.3 per cent jump to Rs 603.6 crore (Rs 6.04 billion), while employee cost rose 17.4 per cent to Rs 126.7 crore (Rs 1.27 billion).
Selling and other expenses grew by 36.9 per cent to Rs 300 crore (Rs 3 billion)
Meanwhile, in a corporate development, ZEEL executive vice chairman Subodh Kumar has resigned with immediate effect. He will nevertheless continue as a non-executive director on the board of the company.